Customs Reform and the Pursuit of Tax Receivables: Ultimatum for Customs and Tightened Supervision of Large Taxpayers

Indonesia's fiscal and customs sector has once again become a public focus following a harsh ultimatum issued to the Directorate General of Customs and Excise (DJBC), signaling the urgency of governance improvement and integrity enforcement. Concurrently, the Directorate General of Taxes (DJP) faces immense pressure due to high tax receivables and low revenue contributions from Large Taxpayers (WP), prompting the authority to tighten supervision through the mandate of centralized financial reporting. This highlight summarizes the push for Customs reform, the DJP's efforts to collect outstanding tax obligations, and the potential revenue boost from the implementation of the latest financial reporting rules.

DJBC received a harsh ultimatum from President-elect Prabowo Subianto regarding the agency's performance and internal governance. The main scrutiny is directed at maladministration practices, service inefficiency, and apparatus integrity issues that hinder the flow of goods and investment. The threat of freezing or total restructuring of Customs and Excise made by Prabowo is deemed by economists to be a crucial turning point for customs reform in Indonesia. This high pressure is expected to encourage comprehensive improvements in the DJBC's service system, supervision, and apparatus integrity.

While the focus of reform is directed at customs, the DJP faces serious challenges in tax revenue collection. Tax revenue from the Large Tax Office (LTO) Regional Office only reached half of the annual target by September 2025, indicating poor performance in collecting taxes from the country's largest entities and worsening the potential APBN shortfall.

Amidst this situation, the nation's tax receivables have soared to reach Rp139 trillion. Responding to the surge in receivables and the low LTO performance, the DJP is preparing stern action to pursue jumbo tax delinquents, including asset seizure and legal measures. The effort to tighten supervision is also supported by the mandate for companies to report their finances through a centralized platform belonging to the Ministry of Finance (Kemenkeu). This new regulation is expected to boost tax revenue because it facilitates the DJP in data reconciliation and prevents tax avoidance practices.

This situation has significant implications for institutional integrity and fiscal health. The ultimatum to Customs and Excise creates an urgency for customs reform, which, if successful, will streamline logistics flow and improve the investment climate. On the taxation front, the Rp139 trillion surge in tax receivables and low LTO performance indicate a pressing need for a tightening of fiscal law enforcement. The mandate for centralized financial reporting will increase the administrative burden for large companies but also strengthen governance and ensure tax equality among companies, which ultimately contributes positively to state revenue.

The set of issues today highlights the government's strong determination to improve Indonesia's fiscal and customs governance. The Customs reform driven by the political ultimatum has the potential to be a vital transformative moment. Concurrently, the DJP must drastically step up law enforcement to pursue jumbo tax receivables and ensure LTO compliance so that revenue targets are met. Business actors must heed these regulatory tightenings, especially the centralized financial reporting mandate, and ensure compliance to avoid legal sanctions and support the nation's fiscal stability.